Economics lesson

Economics lesson: My daughter is entering college next month. She will be studying economics. Until last night, I had wondered if that was the right course of study for her. (I thought she’d either become a brain surgeon or be in a bluegrass band — or both.) Last night, she picked me up at the airport and while driving home, she informed me that there is a sales tax holiday on certain purchases in Tennessee this weekend. (As Tennessee does not have an income tax, our sales tax is relatively high and citizens are known to head to one of the many states that border ours to make major back-to-school purchases — thus this sales-tax-holiday.) I thought she may be informing me of this sales tax news as she has a summer job at J-Crew and back to school clothing (for individual items priced less than $100) is included in the tax-holiday, so they expect a busy weekend. However, I quickly learned that her understanding of the economic impact of taxes — to stimulate or discourage consumer behaviour — was more astute, as she then began to inform me in great detail how, if purchased this weekend, a new laptop she is wanting for school is covered by the exemption. She then, without notes, broke-down the relative savings of purchasing the computer with an educational discount during the sales-tax holiday. And then she said she could get a 10% “recycling” discount for trading in her first-generation (and broken) iPod for a new one, for which she will then get a full rebate because of another promotion Apple is running. Bottomline: I think a new MacBook will be entering our house this weekend. And I think a brilliant economist (and sales person) will be entering college next month.

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